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CFO Survey

    Survey Reveals CFOs Reaction To Recession Concerns

  • Nearly Half Cutting Back On Hiring and One Third Delaying Spending
  • CFOs Also Favor Process Change For Ratings Agencies

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FLORHAM PARK, N.J. and NEW YORK, March 26, 2008 — CFOs of American companies believe recession concerns in the U.S. are impacting their Company’s budgets, spending and hiring, according to a recent survey of CFOs conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business.

The economic downturn and weakness of the U.S. dollar continue to impact businesses in the U.S.  While more than one third of CFOs (34%) reported that the weakness of the U.S. dollar has led to increased international sales, over half (51%) have seen an increase in the costs of commodities/raw materials, and one third (33%) say their quarterly earnings have decreased.

When asked what their view was of a potential recession in the U.S. in the current year, 41 percent of the CFOs surveyed said they believe the U.S. is currently in a recession, while an additional 32 percent believe the U.S. will likely go into a recession within the next 6 months. Only 18 percent said they did not believe the U.S. would go into a recession at all in 2008.

"What we are hearing from CFOs is, recession or not, they are taking defensive measures to combat the economic slowdown.” said John Elliott, Dean of the Zicklin School of Business at Baruch College.  "This quarter’s survey revealed that almost half of the CFOs are in agreement with U.S. economists and believe we are currently in a recession."

Economic Optimism Continues to Sink

The CFO Optimism Index for the U.S. economy was 54.29 for this quarter, dropping even further past last quarter's three-year low of 56.26.  Thirty-four percent of the CFOs surveyed said that, during the first quarter of this year, they had delayed the implementation of business-related spending due to recession concerns.

CFOs' outlook toward their own companies decreased again this quarter, as the Optimism Index of the CFOs' own companies sank to 68.12, falling 2.1 points lower than last quarter, which itself was a three-year low.

“This quarter’s data points to a continued decline in optimism among CFOs,” said Michael P. Cangemi, FEI President and CEO.  “With the permeation of pessimism, the survey revealed two-thirds of companies identifying some type of cutbacks, specifically in the areas of layoffs and reduced hiring.  It is now more important than ever for CFOs to identify efficiencies and conduct smart business.”

Budget Changes
In response to the current economic downturn, 46 percent of the CFOs surveyed identified hiring as an area for cutbacks.  Nearly a quarter (24%) selected conducting layoffs when asked the same question.  Interestingly, a similar number (23%) of CFOs surveyed said they had actually increased their marketing / advertising budget as a response to the economic downturn.

Additional Data:

Ratings Agencies’ Process
CFOs surveyed support changing the ratings agency process.  Thirty-five percent of CFOs said ratings agencies should create a new rating scale. Nineteen percent of those surveyed recommended the addition of warning labels to the agencies’ ratings, with close to half of respondents (46%) stating that they would have more confidence in the ratings if the agencies changed their process to include these warnings and provide better distinctions for structured finance ratings.

Economic Stimulus

When asked about the economic stimulus bill, only 12 percent of CFOs said they would increase equipment purchases to take advantage of the recently-passed bill which allows business accelerated depreciation tax breaks on equipment purchased and placed into service in 2008.

About the Survey
Full survey results are available at or from Jamie Renninger at  

This quarter, the CFO Outlook Survey, conducted by Financial Executives International and Baruch College's Zicklin School of Business, interviewed 209 corporate CFOs electronically the week of
March 3. CFOs from both public and private companies and from a broad range of industries, revenues and geographic areas, including some off-shore companies, are represented. Survey respondents are members of Financial Executives International.

Financial Executives International has been conducting surveys gauging the country's economic outlook from the perspective of CFOs for the past ten years.

About FEI
Financial Executives International (FEI) is the leading advocate for the views of corporate financial management. Its 15,000 members hold policy- making positions as chief financial officers, treasurers, and controllers. FEI enhances member professional development through peer networking, career planning services, conferences, publications, and special reports and research. Members participate in the activities of 86 chapters, 75 of which are in the United States and 11 in Canada.  For more information about FEI, visit

About Baruch
Baruch College is a senior college of the City University of New York.  The Zicklin School of Business at Baruch College is the largest and most diverse AACSB accredited collegiate school of business in the nation. Baruch has a long tradition of producing accounting and finance graduates who become leaders as CPAs and CFOs.

MEDIA CONTACT: Jamie Renninger of FD (212) 850-5658